Facebook Rival Vero Faces a User Backlash

By

Jon Swartz

March 1, 2018 12:14 p.m. ET

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With nearly 3 million members, privately held social platform Vero has a fraction of Facebook’s (ticker: FB) audience of 2.13 billion, yet it and other social-media start-ups have made inroads as Facebook's user growth stalls in the U.S., India, and elsewhere.

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Vero has climbed higher in Apple’s (AAPL) App Store and Alphabet’s (GOOGL) Google Play by taking a contrarian approach to social media. It has easy-to-manage privacy settings and no ads—which helps protect users from data mining.

It's growing so fast, in fact, that Vero servers have been overwhelmed, leading to technical issues. To mollify new users, it is extending a “Free for Life” offer.

That may be the easy part. Vero's breakneck growth comes as it navigates criticism over its co-founder's business past and difficulties in deleting the app, which claims rights to user content posted.

"To be clear, I am really proud of my family and the time I spent on the construction company," Hariri, who left Saudi Oger in 2013 to "pursue other interests" before founding Vero in 2015, told Barron's. "We worked on amazing projects."

Hariri's father, former Lebanese Prime Minister Rafic Hariri, who founded Saudi Oger, was assassinated in 2005. Ayman Hariri served as deputy CEO and chairman of Saudi Oger; upon his departure, he ceased to be involved in any decisions or board oversight, Vero said in a statement.

Ayman Hariri says it was simply time to leave and pursue his dream as a tech entrepreneur.

"It's been a dream of mine to create something of value in tech," he says. "Our members believe this is a truly social network."

Vero has benefited as troubles pile up at Facebook, which is coping with slackening user engagement and growth, the hemorrhaging of young users to Snap (SNAP) and other social-media services, and increasing calls for regulation after Russian hackers exploited its massive platform during the 2016 presidential election.

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"While it's background noise for investors in the near-term, with the News Feed overhaul and other actions that Facebook has implemented over the past few months, its clear with more 'heat in
the kitchen from the Beltway' that further modest changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months," analyst Daniel Ives wrote.

The market for 3-D sensing in smartphones could be worth $10 billion by 2021, opines David Dai of Bernstein, which should be good news for suppliers such as Sony, AAC Technologies, Sunny Optical Technology Group, Largan Precision; Lumentum Holdings, and ams AG. Apple is leading with the iPhone, but there's a whole new wave of technology coming called "time of flight."

Twilio's "Flex" software, and Microsoft's "Teams" program are examples of how enterprise applications are changing to embrace the "wave of change" rippling through corporations, emphasizing collaborations between far-flung teams of people, write analysts at Canaccord Genuity.

Facebook Rival Vero Faces a User Backlash

With nearly 3 million members, privately held social platform Vero has a fraction of Facebook’s (ticker: FB) audience of 2.

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